City Hall proposes to make an exception to a policy set just last May to provide Greenfire Development with $4.2 million to turn the Suntrust Building into a hotel.
"I really think this is a special case," City Manager Tom Bonfield said today.
The policy set $45 million as a minimum private capital investment for the city to consider a "major property investment." While total cost estimate for the Suntrust renovation is $52.7 million, its "qualified capital investment" is estimated at only $30.7 million according to the city finance office.
However, Bonfield said the complexity of Greenfire's overall financing plan and the difficulties involved in the building's structural renovation qualify the project for special consideration.
"A lot has to fall into place for this to happen," he said.
Bonfield plans to ask the City Council to hold a public hearing on the idea Sept. 20.
Suntrust Bank sold its 17-story building to Greenfire in 2006, after a new fire code forced the bank to close most of the building. Suntrust moved its own offices rather than undertake a difficult and expensive remodeling of the 1937 landmark.
The proposed agreement between Greenfire and the city is for a $1 million loan, to be repaid over 16 years, and $3.2 million in cash. Before it could get the money, Greenfire would have to finish the renovation by July 31, 2013.
The city is estimating that increased tax revenue from the hotel would more than repay the taxpayers' investment.
According to a city memo, Greenfire also hopes to secure $25 million from federal "recovery zone" bonds, $11 million in historic tax credits, $4 million in other tax credits and $1 million from Durham County.
Deputy County Manager Carolyn Titus said Greenfire has asked for county help with the project and the request is under consideration, but she is legally barred from discussing further details.
"All of that discussion is a matter for closed [commissioners'] session,” Titus said.
